First Interstate BancSystem, Inc. (NASDAQ:FIBK) reports second quarter
2012 net income available to common shareholders of $12.2 million, or
$0.28 per diluted share, as compared to $11.4 million, or $0.26 per
diluted share, for first quarter 2012 and $9.0 million, or $0.21 per
diluted share, for second quarter 2011.

Significant financial statement items for the second quarter of 2012
include:

Total revenues of $88.8 million during the three months ended June 30,
2012 represented a 2.1% increase over the prior quarter and a 5.6%
increase over the same quarter of the prior year;

Non-performing assets decreased $41.4 million to $226.2 million, or
3.10% of total assets, as of June 30, 2012, compared to 3.60% of total
assets as of March 31, 2012 and 4.05% of total assets as of June 30,
2011;

Provisions for loan losses were $12.0 million for the three months
ended June 30, 2012, compared to $11.3 million for the three months
ended March 31, 2012 and $15.4 million for the three months ended June
30, 2011;

Net charge-offs were $25.1 million during the three months ended June
30, 2012, compared to $7.9 million during the three months ended March
31, 2012 and $15.3 million during the three months ended June 30,
2011; and

* See Non-GAAP Financial Measures included herein for a discussion
regarding tangible and net tangible book value per common share.

“We continue to generate strong year-over-year earnings growth, with our
second quarter earnings per share increasing by 33% from the same period
last year,” said Ed Garding, President and Chief Executive Officer of
First Interstate BancSystem, Inc. “We are seeing stable to positive
trends in most areas of the business, including an improving deposit
mix, continued steady declines in our level of criticized loans and
strong capital ratios. We are also starting to see a higher volume of
resolutions to problem loans, which is resulting in an overall
improvement in our asset quality,” Garding further noted.

REVENUE SUMMARY

(Unaudited; $ in thousands)

For the Three Months Ended

Sequential Quarter

% Change

Year Over Year

% Change

June 30,2012

March 31,2012

June 30,2011

Interest income

$

69,067

$

69,057

$

73,551

0.0

%

-6.1

%

Interest expense

7,893

8,423

11,024

-6.3

%

-28.4

%

Net interest income

61,174

60,634

62,527

0.9

%

-2.2

%

Non-interest income:

Income from the origination and sale of loans

9,420

8,384

4,109

12.4

%

129.3

%

Other service charges, commissions and fees

8,254

8,424

7,768

-2.0

%

6.3

%

Service charges on deposit accounts

4,455

4,161

4,385

7.1

%

1.6

%

Wealth management revenues

3,815

3,283

3,689

16.2

%

3.4

%

Investment securities gains, net

198

31

16

538.7

%

1,137.5

%

Other income

1,520

2,099

1,624

-27.6

%

-6.4

%

Total non-interest income

27,662

26,382

21,591

4.9

%

28.1

%

Total revenues

$

88,836

$

87,016

$

84,118

2.1

%

5.6

%

Tax equivalent interest margin ratio

3.74

%

3.72

%

3.84

%

For the Six Months Ended

Year Over Year

% Change

June 30,2012

June 30,2011

Interest income

$

138,124

$

147,394

-6.3

%

Interest expense

16,316

23,069

-29.3

%

Net interest income

121,808

124,325

-2.0

%

Non-interest income:

Income from the origination and sale of loans

17,804

7,554

135.7

%

Other service charges, commissions and fees

16,678

15,148

10.1

%

Service charges on deposit accounts

8,616

8,495

1.4

%

Wealth management revenues

7,098

6,999

1.4

%

Investment securities gains, net

229

18

1,172.2

%

Other income

3,619

3,536

2.3

%

Total non-interest income

54,044

41,750

29.4

%

Total revenues

$

175,852

$

166,075

5.9

%

Tax equivalent interest margin ratio

3.73

%

3.78

%

Net Interest Income

The Company's net interest margin ratio increased to 3.74% during second
quarter 2012, as compared to 3.72% during first quarter 2012, primarily
due to the recovery of $766 thousand of previously charged-off interest.
Exclusive of interest recoveries, the Company's net interest margin
ratio would have been approximately 3.70% during second quarter 2012.

Decreases in net interest margin ratio during the three and six months
ended June 30, 2012, as compared to the same periods in 2011, were due
to lower outstanding loan balances and lower yields earned on the
Company's loan and investment portfolios, which were partially offset by
reductions in the cost of interest bearing liabilities combined with a
shift from higher-costing savings and time deposits to lower-costing
demand deposits.

Non-interest Income

Non-interest income increased during the three and six months ended June
30, 2012, as compared to the same periods in the prior year and the
three months ended March 31, 2012, primarily due to increases in income
from the origination and sale of residential mortgage loans. While
refinancing activity represented 59% of the Company's residential loan
origination activity during second quarter 2012, new loans for home
purchases increased 68% over the prior quarter and 41% from second
quarter 2011.

Other income decreased during second quarter 2012, as compared to first
quarter 2012 and second quarter 2011, primarily due to fluctuations in
earnings on securities held under deferred compensation plans. Decreases
in earnings on securities held under deferred compensation plans were
partially offset by a $581 thousand gain on the sale of a bank building
during second quarter 2012.

NON-INTEREST EXPENSE

(Unaudited; $ in thousands)

For the Three Months Ended

Sequential Quarter

% Change

Year Over Year

% Change

June 30,2012

March 31,2012

June 30,2011

Non-interest expense:

Salaries and wages

$

21,640

$

21,564

$

20,554

0.4

%

5.3

%

Employee benefits

6,819

8,966

7,335

-23.9

%

-7.0

%

Occupancy, net

4,037

3,988

4,013

1.2

%

0.6

%

Furniture and equipment

3,189

3,138

3,129

1.6

%

1.9

%

Outsourced technology services

2,179

2,266

2,212

-3.8

%

-1.5

%

Other real estate owned ("OREO") expense, net of income

1,806

1,105

2,042

63.4

%

-11.6

%

FDIC insurance premiums

1,601

1,595

1,629

0.4

%

-1.7

%

Professional fees

1,002

933

726

7.4

%

38.0

%

Mortgage servicing rights amortization

817

895

671

-8.7

%

21.8

%

Mortgage servicing rights impairment (recovery)

52

(868

)

27

106.0

%

92.6

%

Core deposit intangibles amortization

355

355

361

0.0

%

-1.7

%

Other expenses

13,802

13,503

11,493

2.2

%

20.1

%

Total non-interest expense

$

57,299

$

57,440

$

54,192

-0.2

%

5.7

%

For the Six Months Ended

Year Over Year% Change

June 30,2012

June 30,2011

Non-interest expense:

Salaries and wages

$

43,204

$

40,757

6.0

%

Employee benefits

15,785

14,834

6.4

%

Occupancy, net

8,025

8,228

-2.5

%

Furniture and equipment

6,327

6,349

-0.3

%

Outsourced technology services

4,445

4,453

-0.2

%

FDIC insurance premiums

3,196

4,095

-22.0

%

OREO expense, net of income

2,911

3,753

-22.4

%

Professional fees

1,935

1,505

28.6

%

Mortgage servicing rights amortization

1,712

1,478

15.8

%

Mortgage servicing rights impairment recovery

(816

)

(320

)

155.0

%

Core deposit intangibles amortization

710

723

-1.8

%

Other expenses

27,305

21,295

28.2

%

Total non-interest expense

$

114,739

$

107,150

7.1

%

Salaries and wages expense increased during the three and six months
ended June 30, 2012, as compared to the same periods in the prior year
primarily due to increases in incentive compensation paid in the form of
commissions and overtime to the Company's real estate lenders and
processors, higher incentive bonus accruals reflective of the Company's
improved performance during the first half of 2012 and inflationary wage
increases.

Employee benefits expense decreased during second quarter 2012, as
compared to first quarter 2012, primarily due to decreases in the market
value of securities held under deferred compensation plans and lower
payroll tax and group insurance expenses. During second quarter 2012,
fluctuations in the market value of securities held under deferred
compensation plans resulted in a decrease in employee benefits expense
of $356 thousand, as compared to an increase in employee benefits
expense of $474 thousand during first quarter 2012 and $197 thousand
during second quarter 2011.

For the six months ended June 30, 2012, as compared to the same period
in 2011, decreases in the market values of securities held under
deferred compensation plans were more than offset by increases in
stock-based compensation expense, higher profit sharing accruals
reflective of improved performance and increases in group medical
insurance costs.

Increases in OREO expense during second quarter 2012, as compared to
first quarter of 2012, were attributable to additional carrying costs
associated with properties foreclosed during the period. Second quarter
2012 OREO expense included net operating expenses of $1.3 million,
compared with net operating expenses of $453 thousand during first
quarter 2012. Decreases in OREO expense during the three and six months
ended June 30, 2012, as compared to the same periods in the prior year,
were primarily the result of write-downs in the estimated fair value of
OREO properties. During the three and six months ended June 30, 2012,
the Company wrote-down the estimated fair value of OREO properties by
$580 thousand and $1.1 million, respectively, as compared to write-downs
of $2.0 million and $3.5 million during the same respective periods in
the prior year.

Included in other expenses for second quarter 2012, is $1.5 million of
donation expense associated with the second quarter 2012 sale of a bank
building to a charitable organization. In addition, unamortized issuance
costs of $428 thousand associated with redeemed junior subordinated
debentures were charged to other expense during second quarter 2012.
Other expense increased during the six months ended June 30, 2012, as
compared to the same period in 2011, primarily due to increased
donations expense and the write-off of unamortized debt issuance costs
discussed above, and the accrual of $3.0 million of estimated collection
and settlement costs during the first quarter 2012.

ASSET QUALITY

(Unaudited; $ in thousands)

For the Three Months Ended

June 30,2012

March 31,2012

June 30,2011

Allowance for loan losses - beginning of period

$

115,902

$

112,581

$

124,446

Charge-offs

(26,745

)

(9,087

)

(16,102

)

Recoveries

1,637

1,158

835

Provision

12,000

11,250

15,400

Allowance for loan losses - end of period

$

102,794

$

115,902

$

124,579

June 30,2012

March 31,2012

June 30,2011

Period end loans

$

4,169,963

$

4,158,616

$

4,281,260

Average loans

4,159,565

4,165,203

4,269,637

Non-performing loans:

Non-accrual loans

129,923

180,910

229,662

Accruing loans past due 90 days or more

6,451

5,017

2,194

Troubled debt restructurings

35,959

36,838

31,611

Total non-performing loans

172,333

222,765

263,467

Other real estate owned

53,817

44,756

28,323

Total non-performing assets

$

226,150

$

267,521

$

291,790

Net charge-offs to average loans, annualized

2.43

%

0.76

%

1.43

%

Provision for loan losses to average loans, annualized

1.16

%

1.08

%

1.45

%

Allowance for loan losses to period end loans

2.47

%

2.79

%

2.91

%

Allowance for loan losses to total non-performing loans

59.65

%

52.03

%

47.28

%

Non-performing loans to period end loans

4.13

%

5.36

%

6.15

%

Non-performing assets to period end loans and other real estate owned

5.35

%

6.36

%

6.77

%

Non-performing assets to total assets

3.10

%

3.60

%

4.05

%

As of June 30, 2012, total non-performing loans included $152 million of
real estate loans, of which $53 million were construction loans and $80
million were commercial real estate loans. Non-performing construction
loans as of June 30, 2012 were comprised of land acquisition and
development loans of $39 million, commercial construction loans of $11
million and residential construction loans of $3 million.

Non-performing loans decreased 23% as of June 30, 2012, as compared to
March 31, 2012, primarily due to the movement of non-accrual loans out
of the loan portfolio through charge-off or foreclosure.

Net charged-off loans increased during second quarter 2012, as compared
to first quarter 2012 and second quarter 2011. Nine borrowers accounted
for 73% of loans charged-off during second quarter 2012. Charge-offs
during second quarter 2012 were primarily comprised of land development,
commercial construction and commercial real estate loans.

During second quarter 2012, the Company recorded additions to OREO of
$20 million. Approximately 75% of these additions were attributable to
the loans of five borrowers. Second quarter 2012 OREO additions were
partially offset by write downs of the fair value of OREO properties of
$568 thousand and sales of OREO with a net book value of $10 million at
a slight gain.

CREDIT QUALITY TRENDS

(Unaudited; $ in thousands)

Provision for

Loan Losses

Net Charge-offs

Allowance for

Loan Losses

Accruing Loans

30-89 Days

Past Due

Non-Performing

Loans

Non-Performing

Assets

Q1 2009

$

9,600

$

4,693

$

92,223

$

98,980

$

103,653

$

122,300

Q2 2009

11,700

5,528

98,395

88,632

135,484

167,273

Q3 2009

10,500

7,147

101,748

91,956

125,083

156,958

Q4 2009

13,500

12,218

103,030

63,878

124,678

163,078

Q1 2010

11,900

8,581

106,349

62,675

133,042

177,022

Q2 2010

19,500

11,521

114,328

99,334

158,113

200,451

Q3 2010

18,000

12,092

120,236

47,966

202,008

237,304

Q4 2010

17,500

17,256

120,480

57,011

210,684

244,312

Q1 2011

15,000

11,034

124,446

68,021

249,878

281,873

Q2 2011

15,400

15,267

124,579

70,145

263,467

291,790

Q3 2011

14,000

18,276

120,303

62,165

262,578

287,658

Q4 2011

13,751

21,473

112,581

75,603

241,470

278,922

Q1 2012

11,250

7,929

115,902

58,531

222,765

267,521

Q2 2012

12,000

25,108

102,794

55,074

172,333

226,150

CRITICIZED LOANS

(Unaudited; $ in thousands)

Other Assets

Especially

Mentioned

Substandard

Doubtful

Total

Q1 2009

$

163,402

$

231,861

$

40,356

$

435,619

Q2 2009

230,833

242,751

48,326

521,910

Q3 2009

239,320

271,487

60,725

571,532

Q4 2009

279,294

271,324

69,603

620,221

Q1 2010

312,441

311,866

64,113

688,420

Q2 2010

319,130

337,758

92,249

749,137

Q3 2010

340,075

340,973

116,003

797,051

Q4 2010

305,925

303,653

133,353

742,931

Q1 2011

293,899

299,072

135,862

728,833

Q2 2011

268,450

309,029

149,964

727,443

Q3 2011

261,501

305,145

134,367

701,013

Q4 2011

240,903

269,794

120,165

630,862

Q1 2012

242,071

276,165

93,596

611,832

Q2 2012

220,509

243,916

81,473

545,898

LOANS

(Unaudited; $ in thousands)

June 30,2012

March 31,2012

June 30,2011

Sequential Quarter

% Change

Year Over Year

% Change

Real estate:

Commercial

$

1,517,400

$

1,533,624

$

1,555,964

-1.1

%

-2.5

%

Construction:

Land acquisition & development

240,550

272,874

312,690

-11.8

%

-23.1

%

Residential

51,193

50,332

63,364

1.7

%

-19.2

%

Commercial

59,911

65,196

76,740

-8.1

%

-21.9

%

Total construction loans

351,654

388,402

452,794

-9.5

%

-22.3

%

Residential

572,018

562,588

578,739

1.7

%

-1.2

%

Agricultural

171,087

171,685

177,728

-0.3

%

-3.7

%

Total real estate loans

2,612,159

2,656,299

2,765,225

-1.7

%

-5.5

%

Consumer:

Indirect consumer loans

418,604

407,389

413,825

2.8

%

1.2

%

Other consumer loans

144,442

142,144

152,704

1.6

%

-5.4

%

Credit card loans

58,166

56,540

59,655

2.9

%

-2.5

%

Total consumer loans

621,212

606,073

626,184

2.5

%

-0.8

%

Commercial

720,010

708,397

724,158

1.6

%

-0.6

%

Agricultural

138,115

128,599

133,898

7.4

%

3.1

%

Other loans, including overdrafts

2,319

568

3,297

308.3

%

-29.7

%

Loans held for investment

4,093,815

4,099,936

4,252,762

-0.1

%

-3.7

%

Mortgage loans held for sale

76,148

58,680

28,498

29.8

%

167.2

%

Total loans

$

4,169,963

$

4,158,616

$

4,281,260

0.3

%

-2.6

%

Total loans increased as of June 30, 2012, compared to March 31, 2012,
with all major categories of loans except real estate showing growth.
Decreases in real estate loans as of June 30, 2012, as compared to March
31, 2012, are primarily attributable to the movement of lower quality
loans out of the loan portfolio through charge-off or foreclosure
combined with low loan demand. Growth in residential real estate loans
as of June 30, 2012, compared to March 31, 2012, is attributable to the
retention of some loan production that has typically been sold in the
secondary market.

DEPOSITS

(Unaudited; $ in thousands)

June 30,2012

March 31,2012

June 30,2011

Sequential Quarter

% Change

Year Over Year

% Change

Non-interest bearing demand

$

1,337,777

$

1,284,823

$

1,109,905

4.1

%

20.5

%

Interest bearing:

Demand

1,586,962

1,618,174

1,233,039

-1.9

%

28.7

%

Savings

1,495,230

1,480,435

1,703,548

1.0

%

-12.2

%

Time, $100 and over

641,070

671,014

772,567

-4.5

%

-17.0

%

Time, other

840,340

856,388

975,606

-1.9

%

-13.9

%

Total interest bearing

4,563,602

4,626,011

4,684,760

-1.3

%

-2.6

%

Total deposits

$

5,901,379

$

5,910,834

$

5,794,665

-0.2

%

1.8

%

Total deposits remained stable as of June 30, 2012, as compared to March
31, 2012, and increased slightly compared to June 30, 2011. As a result
of a regulatory change allowing businesses to receive interest on
checking accounts, the Company discontinued its savings sweep product
resulting in a shift of approximately $300 million from savings deposits
into interest-bearing demand deposits during first quarter 2012. During
second quarter 2012, the Company continued to experience a favorable
shift in the composition of deposits away from higher-costing time
deposits into non-interest bearing demand deposits.

REDEMPTION OF JUNIOR SUBORDINATED DEBENTURES HELD BY SUBSIDIARY TRUSTS

On June 26, 2012, the Company redeemed $41.2 million of 30-year junior
subordinated deferrable interest debentures issued by the Company to an
unconsolidated subsidiary trust. Unamortized issuance costs of $428
thousand were charged to other expenses on the date of redemption. The
redemption of the junior subordinated debentures caused a mandatory
redemption of $40 million of 30-year floating rate mandatorily
redeemable capital trust preferred securities issued by the
unconsolidated subsidiary trust to third-party investors.

CAPITAL

(Unaudited, $ in thousands, except per share data)

June 30,2012

March 31,2012

June 30,2011

Sequential Quarter

% Change

Year Over Year

% Change

Preferred stockholders' equity

$

50,000

$

50,000

$

50,000

0.0

%

0.0

%

Common stockholders' equity

718,070

709,781

686,948

1.2

%

4.5

%

Accumulated other comprehensive income, net

18,265

19,494

22,397

-6.3

%

-18.4

%

Total stockholders' equity

$

786,335

$

779,275

$

759,345

0.9

%

3.6

%

Book value per common share

$

17.03

$

16.88

$

16.51

0.9

%

3.1

%

Tangible book value per common share*

$

12.63

$

12.47

$

12.05

1.3

%

4.8

%

Net tangible book value per common share *

$

14.03

$

13.87

$

13.45

1.2

%

4.3

%

Weighted average common shares outstanding for basic earnings per
common share computation

42,966,926

42,783,769

42,781,894

0.4

%

0.4

%

Weighted average common shares outstanding for diluted earnings per
common share computation

43,060,204

42,982,543

42,896,611

0.2

%

0.4

%

* See Non-GAAP Financial Measures included herein for a discussion
of tangible and net tangible book value per common share.

CAPITAL RATIOS

(Unaudited)

June 30,2012

March 31,2012

June 30,2011

Tangible common stockholders' equity to tangible assets*

7.67

%

7.48

%

7.38

%

Net tangible common stockholders' equity to tangible assets*

8.52

%

8.32

%

8.24

%

Tier 1 common capital to total risk weighted assets

11.51

%

**

11.35

%

10.56

%

Leverage ratio

9.54

%

**

10.01

%

9.69

%

Tier 1 risk-based capital

14.22

%

**

14.90

%

14.03

%

Total risk-based capital

16.20

%

**

16.89

%

16.01

%

* See Non-GAAP Financial Measures included herein for a discussion
of tangible and net tangible common stockholders' equity to
tangible assets.

** Preliminary estimate - may be subject to change.

The Company's leverage, tier 1 and total risk-based capital ratios
declined as of June 30, 2012, compared to March 31, 2012, due to the
mandatory redemption of $40 million of capital trust preferred
securities issued by an unconsolidated subsidiary of the Company that
qualified as tier 1 capital under current regulatory capital guidelines.
As of June 30, 2012, the Company had capital levels that, in all cases,
exceeded the “well capitalized” requirements under all regulatory
capital guidelines.

Second Quarter 2012 Conference Call for Investors

First Interstate BancSystem, Inc. will host a conference call to discuss
second quarter 2012 results at 11:00 a.m. Eastern Time (9:00 a.m. MDT)
on Tuesday, July 24, 2012. The conference call will be accessible by
telephone and through the Internet. Participants may join the call by
dialing 1-877-317-6789 or by logging on to www.FIBK.com.
The call will be recorded and made available for replay after 1:00 p.m.
Eastern Time (11:00 a.m. MDT) on July 24, 2012 through August 24, 2012
by dialing 1-877-344-7529 (using conference ID 10015558). The call will
also be archived on our website, www.FIBK.com,
for one year.

About First Interstate BancSystem, Inc.

First Interstate BancSystem, Inc. is a financial and bank holding
company incorporated in 1971 and headquartered in Billings, Montana. The
Company operates 72 banking offices in 42 communities in Montana,
Wyoming and western South Dakota. Through First Interstate Bank, the
Company delivers a comprehensive range of banking products and services
to individuals, businesses, municipalities and other entities throughout
the Company's market areas.

Cautionary Statement

This release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended, which are covered by
the safe harbor provisions of such sections. These statements include
statements about decreased levels of criticized loans, stabilization of
the loan portfolio, the Company's level of allowance for loan losses,
manageability of credit costs and levels of profitability. Therefore,
the Company's actual results, performance or achievements may differ
materially from those expressed in or implied by these forward-looking
statements. In some cases, you can identify forward-looking statements
by the use of words such as “may,” “could,” “expect,” “intend,” “plan,”
“seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,”
“continue,” “likely,” “will,” “would” and variations of these terms and
similar expressions, or the negative of these terms or similar
expressions.

The following factors, among others, may cause actual results to differ
materially from current expectations in the forward-looking statements,
including those set forth in this release: credit losses; concentrations
of real estate loans; economic and market developments, including
inflation; commercial loan risk; adequacy of the allowance for loan
losses; impairment of goodwill; changes in interest rates; access to
low-cost funding sources; increases in deposit insurance premiums;
inability to grow business; adverse economic conditions affecting
Montana, Wyoming and western South Dakota; governmental regulation and
changes in regulatory, tax and accounting rules and interpretations;
sweeping changes in regulation of financial institutions due to passage
of the Dodd-Frank Act; changes in or noncompliance with governmental
regulations; effects of recent legislative and regulatory efforts to
stabilize financial markets; dependence on the Company’s management
team; ability to attract and retain qualified employees; failure of
technology; reliance on external vendors; disruption of vital
infrastructure and other business interruptions; illiquidity in the
credit markets; inability to meet liquidity requirements; lack of
acquisition candidates; failure to manage growth; competition; inability
to manage risks in turbulent and dynamic market conditions; ineffective
internal operational controls; environmental remediation and other
costs; failure to effectively implement technology-driven products and
services; litigation pertaining to fiduciary responsibilities; capital
required to support the Company’s bank subsidiary; soundness of other
financial institutions; impact of Basel III capital standards and
forthcoming new capital rules proposed for U.S. banks; inability of our
bank subsidiary to pay dividends; change in dividend policy; lack of
public market for our Class A common stock; volatility of Class A common
stock; voting control of Class B stockholders; decline in market price
of Class A common stock; dilution as a result of future equity
issuances; uninsured nature of any investment in Class A common stock;
anti-takeover provisions; controlled company status; subordination of
common stock to Company debt; uncertainties associated with introducing
new products or lines of business; and, downgrade of the U.S. credit
rating.

A more detailed discussion of each of the foregoing risks is included in
the Company's Annual Report on Form 10-K for the year ended December 31,
2011, filed February 28, 2012. These factors and the other risk factors
described in the Company's periodic and current reports filed with the
Securities and Exchange Commission from time to time, however, are not
necessarily all of the important factors that could cause the Company's
actual results, performance or achievements to differ materially from
those expressed in or implied by any of the Company's forward-looking
statements. Other unknown or unpredictable factors also could harm the
Company's results. Investors and others are encouraged to read the more
detailed discussion of the Company's risks contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 2011.

All forward-looking statements attributable to the Company or persons
acting on the Company's behalf are expressly qualified in their entirety
by the cautionary statements set forth above. Forward-looking statements
speak only as of the date they are made and the Company does not
undertake or assume any obligation to update publicly any of these
statements to reflect actual results, new information or future events,
changes in assumptions or changes in other factors affecting
forward-looking statements, except to the extent required by applicable
laws. If the Company updates one or more forward-looking statements, no
inference should be drawn that the Company will make additional updates
with respect to those or other forward-looking statements.

CONSOLIDATED BALANCE SHEETS

(Unaudited, $ in thousands)

June 30,2012

March 31,2012

June 30,2011

Assets

Cash and due from banks

$

146,577

$

128,341

$

130,413

Federal funds sold

2,854

304

1,764

Interest bearing deposits in banks

387,222

494,279

283,314

Total cash and cash equivalents

536,653

622,924

415,491

Investment securities:

Available-for-sale

1,913,983

1,955,436

1,873,864

Held-to-maturity (estimated fair values of $177,532, $166,932 and
$153,448 at June 30, 2012, March 31, 2012 and June 30, 2011,
respectively)

(1) Average loan balances include non-accrual loans. Interest
income on loans includes amortization of deferred loan fees net of
deferred loan costs, which is not material.

(2) Interest income and average rates for tax exempt loans and
securities are presented on a FTE basis.

(3) Net FTE interest margin during the period equals the
difference between annualized interest income on interest earning
assets and the annualized interest expense on interest bearing
liabilities, divided by average interest earning assets for the
period.

(4) Calculated by dividing total annualized interest on interest
bearing liabilities by the sum of total interest bearing
liabilities plus non-interest bearing deposits.

AVERAGE BALANCE SHEETS

(Unaudited, $ in thousands)

Six Months Ended

June 30, 2012

June 30, 2011

Average

Balance

Interest

Average

Rate

Average

Balance

Interest

Average

Rate

Interest earning assets:

Loans (1) (2)

$

4,162,384

$

116,938

5.65

%

$

4,286,512

$

124,762

5.87

%

Investment securities (2)

2,118,793

23,018

2.18

1,984,000

24,291

2.47

Interest bearing deposits in banks

408,799

516

0.25

472,994

594

0.25

Federal funds sold

2,139

7

0.66

3,061

9

0.59

Total interest earnings assets

6,692,115

140,479

4.22

6,746,567

149,656

4.47

Non-earning assets

626,295

619,837

Total assets

$

7,318,410

$

7,366,404

Interest bearing liabilities:

Demand deposits

$

1,589,440

$

1,253

0.16

%

$

1,256,414

$

1,681

0.27

%

Savings deposits

1,466,113

1,948

0.27

1,727,886

3,753

0.44

Time deposits

1,518,693

8,840

1.17

1,827,269

13,340

1.47

Repurchase agreements

503,428

308

0.12

519,392

408

0.16

Other borrowed funds

34

—

—

5,577

—

—

Long-term debt

37,189

993

5.37

37,490

984

5.29

Subordinated debentures held by subsidiary trusts

122,356

2,974

4.89

123,715

2,903

4.73

Total interest bearing liabilities

5,237,253

16,316

0.63

5,497,743

23,069

0.85

Non-interest bearing deposits

1,254,983

1,080,379

Other non-interest bearing liabilities

48,926

49,395

Stockholders’ equity

777,248

738,887

Total liabilities and stockholders’ equity

$

7,318,410

$

7,366,404

Net FTE interest income

$

124,163

$

126,587

Less FTE adjustments (2)

(2,355

)

(2,262

)

Net interest income from consolidated statements of income

$

121,808

$

124,325

Interest rate spread

3.59

%

3.62

%

Net FTE interest margin (3)

3.73

%

3.78

%

Cost of funds, including non-interest bearing demand deposits (4)

0.51

%

0.71

%

(1) Average loan balances include non-accrual loans. Interest
income on loans includes amortization of deferred loan fees net of
deferred loan costs, which is not material.

(2) Interest income and average rates for tax exempt loans and
securities are presented on a FTE basis.

(3) Net FTE interest margin during the period equals the
difference between annualized interest income on interest earning
assets and the annualized interest expense on interest bearing
liabilities, divided by average interest earning assets for the
period.

(4) Calculated by dividing total annualized interest on interest
bearing liabilities by the sum of total interest bearing
liabilities plus non-interest bearing deposits.

Non-GAAP Financial Measures

In addition to results presented in accordance with generally accepted
accounting principals in the United States of America, or GAAP, this
release contains the following non-GAAP financial measures that
management uses to evaluate capital adequacy: (i) tangible book value
per common share; (ii) net tangible book value per common share; (iii)
tangible common stockholders' equity to tangible assets; (iv) net
tangible common stockholders' equity to tangible assets; and (v)
tangible assets.

For purposes of computing tangible book value per common share, tangible
book value equals common stockholders' equity less goodwill and other
intangible assets (except mortgage servicing rights). Tangible book
value per common share is calculated as tangible common stockholders'
equity divided by shares of common stock outstanding.

For purposes of computing net tangible book value per common share, net
tangible book value equals common stockholders' equity less goodwill
(adjusted for associated deferred tax liability) and other intangible
assets (except mortgage servicing rights). Net tangible book value per
common share is calculated as net tangible common stockholders' equity
divided by shares of common stock outstanding. The Company's goodwill as
of June 30, 2012 was $184 million, of which approximately $159 million
is deductible for income tax purposes over an original period of 15
years. The calculation of net tangible book value takes into account the
full amount of tax benefit of approximately $60 million associated with
deductible goodwill assuming the Company will continue to have income
sufficient to allow it to recognize this benefit in future periods.

For purposes of computing tangible common stockholders' equity to
tangible assets, tangible assets equals total assets less goodwill and
other intangible assets (except mortgage servicing rights). Tangible
common stockholders' equity to tangible assets is calculated as tangible
common stockholders' equity divided by tangible assets.

Management believes that these non-GAAP financial measures are valuable
indicators of a financial institution's capital strength since they
eliminate intangible assets from stockholders' equity and retain the
effect of unrealized losses on securities and other components of
accumulated other comprehensive income (loss) in stockholders' equity.
Management also believes that such financial measures, which are
intended to complement the capital ratios defined by banking regulators,
are useful to investors in evaluating the Company's performance due to
the importance that analysts place on these ratios and also allow
investors to compare certain aspects of our capitalization to other
companies. These non-GAAP financial measures, however, may not be
comparable to similarly titled measures reported by other companies
because other companies may not calculate these non-GAAP measures in the
same manner. As a result, the usefulness of these measures to investors
may be limited, and they should not be considered in isolation or as a
substitute for measures prepared in accordance with GAAP.

The following table reconciles the above described non-GAAP financial
measures to their most directly comparable GAAP financial measures as of
the dates indicated.

NON-GAAP FINANCIAL MEASURES

(Unaudited; $ in thousands except share and per share data)

June 30,2012

March 31,2012

June 30,2011

Total stockholders’ equity (GAAP)

786,335

779,275

759,345

Less goodwill and other intangible assets (excluding mortgage
servicing rights)

190,351

190,708

191,792

Less preferred stock

50,000

50,000

50,000

Tangible common stockholders’ equity (Non-GAAP)

$

545,984

$

538,567

$

517,553

Add deferred tax liability for deductible goodwill

60,499

60,499

60,499

Net tangible common stockholders’ equity (Non-GAAP)

$

606,483

$

599,066

$

578,052

Total assets (GAAP)

7,305,176

7,394,306

7,202,791

Less goodwill and other intangible assets (excluding mortgage
servicing rights)

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